Buying a property is a significant milestone and the process can seem overwhelming – particularly if this is your first home purchase.
Your Harveys agent will support you through the whole process to ensure you have a smooth and enjoyable experience from start to finish.
We have worked with the nervous first time buyer to the seasoned investor. Wherever you stand on the property ladder, we have a full understanding of how you’re feeling.
Whether you are looking for a traditional villa or an open plan penthouse, we have a comprehensive range of listings to help you find the perfect place to call home.
We don’t just leave you at the front door. Once you have found your perfect property, we can help speed up the process by getting your paperwork in order and completed.
Our team can also connect you with the financial support you need to complete your transaction, including mortgage brokers, accountants and tax depreciation specialists.
Understanding the buying process
First time buyers will face a multitude of emotions: excitement, anxiety and confusion to name a few – all of which may cloud judgment when it comes to making big decisions.
Solid preparation and a knowledge of the process will put you on the right track to buying the house of your dreams. The first step in home ownership is knowing exactly what you can afford to buy. Your lender will offer a pre-purchase approval so that you know where you stand financially from the beginning – this will help when it comes to formally approving your loan.
During your search, you may come across a number of different buying methods. Here are the three most common:
This is a blind offer for a property that does not come with a price tag. Interested parties make an offer in writing to be opened by the vendor on an agreed date. You will not know the competing offers or the house value – unless independently surveyed. Your offer may come with a list of conditions but you could potentially be bidding against someone with a similar offer without conditions. For that reason, the sale may go in their favour.
2. Private treaty / offer and negotiation
Similar to tender, but the house will have a publicly known value. The buyer can negotiate back and forth with the seller over the price and conditions. This allows for the buyer to have more control and put more conditions on the offer before committing.
Unlike the tender, you are openly bidding against people. If you win, the offer is considered unconditional which means you can’t back out of it. View the property before attending any auction and if you are serious about bidding, it is a good idea to do your due diligence first by investing in a building inspection and meth testing beforehand. It is important to leave the emotions at the door and have a maximum price in mind and not to go above.
Building and Meth inspections
Congratulations on finding your dream home. It is a huge achievement and undoubtedly a big investment. This could potentially be your abode for the next ten years so it is wise to have the property fully inspected before it’s too late.
Additional costs for first time buyers to plan for
First time buyers should be aware that there are often additional costs associated with purchasing a property.
Building and Meth inspections are not obligatory, but they are highly recommended to identify existing problems before purchase rather than foot a hefty bill to rectify the problem – when it’s your problem.
There are generally certain legal and loan establishment costs that your lending body will pass onto you, so it is advisable to ask about such fees in advance. Lawyer fees will also need to be factored into your costs.
Before you purchase a property, it is important to purchase a Land Information Memorandum Report (LIM) and go through it with your lawyer. The report varies in costs but is usually around $250 – $400. A LIM Report is a summary of information that the council holds on a property. Another useful source of information is a Property File, which includes information on building and drainage and building consents.
Your solicitor or conveyancer may advise you to obtain a new survey of the property which will add further costs.
Harveys agents’ commission is incurred by the vendor, so this is one aspect of the sale you will not need to worry about.
Things to consider when buying a property
Buying a new home is an exciting time, but the process may feel overwhelming – particularly if you’re purchasing your first property.
Buying a property is a long-term investment and not a decision to be taken lightly. A number of factors need to be considered before you make your final decision. Before you call the highest bid at your first auction, have a long think about what you want.
Unlike the questionable décor, your property location is not something you are able to control or change once you have made your purchase.
This means that you will need to consider a number or practicalities. For example, is there sufficient street parking? How close is the property to transportation links? Are you within easy reach of convenience stores and motorway access? The requirements will vary with personal demands, but it is important to identify yours beforehand and ensure that they can be met.
Once you have determined the location where you would like to live, you will need to think about the type of property that suits you.
It is important to take both your current and medium-term situations into an account. For example, a young couple may want to plan ahead and purchase a bigger home if they are thinking about expanding their family. If this is the case, factors like local schools will also become an important consideration.
You may have a style of house in mind but be open to suggestion and practicality.
Alternatively, if you are purchasing an investment property you should do your research accordingly.
Financing your home
Once you have identified your perfect suburb and type of property, it is time to turn your thoughts to finance.
Evaluate the area and research comparative sales. Once you have a good idea of the average house price in your suburb of choice, you’ll need to plan a realistic budget.
Your Harveys agent will be able to provide you with valuable insights into the buying process and can help you research your options when it comes to practical property matters.
For more information, visit our frequently asked questions page
What factors determine the purchase price of the property?
While a number of factors come into play, in the end a property’s worth is judged by only one figure – how much is somebody prepared to pay for it at the time.
The most significant considerations for pricing a property are recent sales, demand and current competition.
Your Harveys agent can provide you with information and advice regarding these aspects of the house-hunting process through competitive market analysis.
It is also important to take note of the prevailing market conditions, as these can generate a genuine insight into short-term trends and help prospective homebuyers gain a feel for what they will need to pay to achieve their goals.
If high buyer demand exists at a time when very little property is actually available, prices are likely to increase.
‘Seller motivation’ – the reason the current owner is attempting to offload the property – might also play a major role in determining the final cost. If a quick sale is required, vendors have little choice but to accept the best offer at the time without the luxury of waiting for a better deal.
Why should I carry out a final inspection on the property I am buying?
No matter how excited you are about purchasing your new property, it is prudent to undertake a final inspection to ensure that the property is still in the same condition it was when you signed the Sale and Purchase Agreement.
You should check that all the fixtures and fittings included in the contract are still present, in working order and that the previous residents did not cause any damage when moving out of the property.
How many homes should I inspect when looking for a property?
We recommend looking at enough properties to gain a comprehensive understanding of the marketplace.
This will provide you with the required knowledge to work out if the property you are interested in buying represents value for money, while also helping you to determine which location appeals to you the most. It is important to feel confident about your eventual purchase.
What is conveyancing and why do I need it?
Conveyancing is a term that refers to the transfer of ownership of a property -most buyers enlist the services of either a conveyancer or solicitor to handle this process on their behalf.
While you are able to act on your own when making a property purchase, the process of documentation and settling can be complicated – and may seem daunting. Bringing in support from an expert who is familiar with legal documents and legislation can make the process easier.
What does a conveyancer do?
Once you have appointed your conveyancer, they will be responsible for a number of tasks as they help you through the settlement process.
Your conveyancer will also check on a number of important things for you, including whether there are any outstanding rates on the property – such as council taxes or water payments. In some cases, your conveyancer will also check over your loan documents for you.
They will also act as a liaison between you and your lender, checking your contract of sale, performing title searches, completing the transfer of funds to settle the property and to complete the transfer of ownership and acting as your legal representative for the transaction.
How much does a conveyancer charge?
The cost of hiring a conveyancer can differ from city to city – and even from transaction to transaction, depending on the amount of time and work involved. It is important to enquire about fees before you agree to appoint anyone.
How do I choose a conveyancer?
There are a number of points to consider when choosing a conveyancer.
These include assessing whether they are available to provide the level of service you are looking for and if you can clearly and effectively communicate with them.
You may be looking for a conveyancer who can explain the process to you – particularly if you are a first-time buyer – so it is important to ensure they have time to take you through every step of the process.
You may also wish to consider location – you may want your conveyancer to be locally-based or easily accessible.
How much deposit do I need to buy a property?
While a good general rule for anyone planning to live in the property they buy is that they’ll need a deposit of twenty percent of the purchase price, this can vary depending on a number of factors. These include the type of home loan you are seeking, as well as the lender you choose. Anyone purchasing a property for an investment is generally required to provide a deposit worth thirty per cent of the purchase price.
Your deposit may come in the form of savings – usually from at least the past three months – as well as contributions from other avenues, which can include family assistance, gifts or bonuses and equity in other property.
What happens to the deposit paid to the agency?
When a contract is signed, a ten percent deposit is usually required. In some cases, an agent may ask for a smaller amount to be paid when an offer is submitted.
When you pay your deposit to an agency, it will be held in trust in a non-interest bearing account.
Buying at Auctions
What is the vendor reserve price?
The “vendor reserve price” indicates the minimum price the vendor is willing to sell the property for.
When bidding has reached the vendor reserve price, the property will be sold at auction – if it does not reach this level, the property may not be sold.
If you are bidding at auction, be aware that negotiations with the highest bidder often begin immediately, so it is essential you are prepared.
What is a vendor bid?
The vendor can make a bid to help move the auction process along – or to help push the property towards the reserve price.
This bid can either be made by the vendor themselves or by the auctioneer on their behalf.
The Auckland District Law Society, together with the New Zealand Real Estate Institute, have a standard form of contract called Particulars and Conditions of sale of Real Estate by Auction. The right of the vendor to place a bid is outlined in the conduct of Auction section clause 2.5. The Real Estate Institute Auction Code of practice states that should the Auctioneer make a bid on behalf of the vendor he/she must declare such bid to ensure the fairness and transparency of the Auction process. Clause 3.4 (a)
When it comes to getting a home loan, the process can seem daunting, especially if this is your first application.
Research and pre-approval
The first step to take is research the types of rates available from different lenders. Home loans can differ significantly and you will want to factor several considerations into your final decision.
It is important to set yourself a budget and determine the amount of money you need to/can borrow. Getting pre-approved for this amount could be a wise idea if you are still shopping around for the perfect property. Pre-approvals tend to last for up to three months and can help you move more quickly once you have found your property.
Documentation for getting a home loan
During this application process, you’ll be asked for several pieces of documentation. This includes showing that you have enough savings to cover the deposit on your property and other fees that may be applicable.
If you are self-employed, you may be asked to show tax returns and other financial information from the past two years, while anyone who is employed will need to show evidence of their payslips.
Making your purchase
Depending on whether you are planning to buy at auction or make an offer on a property, you’ll find there are some slight differences in the transaction process.
If you are buying at auction, you will usually be required to pay a ten per cent deposit at the moment the hammer falls. Your deposit is then held in trust by the agency- in a non-interest bearing trust account.
Processing your loan
At all stages of this process, it is important to ensure your lender remains informed – they will be able to process your loan more quickly if they are aware of all the details.
This information includes the contact details of your solicitor or conveyancer, real estate agent and vendor, as well as a copy of the contract of sale.
A registered valuation might be a condition of your loan too so once this has been carried out and all the other documents have been received and processed, your lender will grant formal approval on your loan and the documents will be sent to you.
At this time, you will need to sign these documents and return them. Your solicitor or conveyancer will then liaise with your lender until the loan settles.